Coyotes to challenge NHL's antitrust laws

by Craig Harris - May. 8, 2009 08:44 PMThe Arizona Republic

The National Hockey League's refusal to let Phoenix Coyotes owner Jerry Moyes sell the team and have it relocated to Canada violates state and federal antitrust laws, according to Thomas Salerno, the team's bankruptcy attorney.

As part of the team's bankruptcy filing, the Coyotes on Thursday sued the NHL and alleged the league has engaged in a "conspiracy" to unlawfully attempt to take control of the franchise and prevent the sale to Canadian billionaire Jim Balsillie, who wants to move the team to Hamilton, Ontario.

Bill Daly, NHL deputy commissioner, said league rules that give team owners the right to approve a sale and relocation are lawful. He said he expects the league's bylaws to be upheld in court.

The lawsuit filing coincided with the first hearing of the team's U.S. Bankruptcy Court case in Phoenix. Moyes, who has invested more than $300 million in the money-losing franchise sought Chapter 11 bankruptcy protection Tuesday and agreed to sell the team for $212.5 million.

The suit against the NHL alleges Phoenix is not a viable hockey market, and that the Coyotes have one of the worst home attendance records and have failed to build a large fan base. During the past three years, the team lost $73 million.

Marc Edelman, a Rutgers Law School professor who has specialized in sports anti-trust cases, said it's unprecedented to have a bankruptcy court decide whether a professional sports league has violated anti-trust laws.

"There always has been a conflict of the powers of an individual team and the power of a league. To the extent a court would overrule this, it would open up the door where an owner could sell to the highest bidder irrespective of how other teams in the league feel about it."